[fuel_addict]

Originally Posted by Abhi_Automobile

Well, I tried to resist this comment but couldn't!

HONDA, even in India where it enjoys more more loyalty than it does worldwide, has got to stop treating itself as a SUPER brand. Its cars sell:

1) Because they are good cars.
2) Because HONDA is well respected.

However, at the end of the day, HONDA is a mass market brand. Its not BMW who can charge a premium for its aspirational value. It simply can't. The fact is, the day its cars start becoming more ordinary, people will stop buying them. They will not buy it since it is a HONDA.

JAZZ is perfect example of how HONDA over- rated itself. It's a great car. Hell, I even think its the best hatchback. However, HONDA thought that it could milk the customers and they would pay anything since they think HONDA is 'premium'. It got a tight slap on its face. Also, even if it corrects the price; all it will do is to make the car sell more, not depreciate its band value. People will not start thinking that HONDA is a cheap brand. Quite simply, because nobody considers it an Uber-cool brand anyway!

Accept your mistake; reduce the price; reap the profits

PS: I think the correct price for JAZZ is arnd 5.5 lacs ex. Delhi. 6 on road.

That is well said.

This seems to be Honda's strategy for all their cars in India - launch a car with less (or no) features and a high price tag, milk the customers with the Honda badge, when the sales drop, throw in few so called add-on features which competition already offers, inflate the price and sell the car. They did this with Civic and the ANHC (no V variant at launch in both cars).

I would call this Honda's "Goondagiri". It is no secret that their general attitude is nothing to write about. They have this 'we don't care' attitude. I owned a Honda for 5 years and can vouch for this.

[vinaydas]

Think Logically people.
Honda Already has sold the Jazz to "Many" people for close to 8 lacs(OTR Bangalore).
Imagine if they reduce the price to say 6.5 lacs . Will it be fair to the people who purchased it before?
They cannot hand over 1.5 lac rupee checks to old customer and nor will they and might i say it would be plain stupid for any company to do so(yes apple did it but 100 dollars is one thing and 2 lacs another).
If you want any price reduction on the jazz (1.5-2 lacs). you have to wait for the Next model change (ala Superb) in around 3 years.

[prince_pervez]

^^ Hyundai did something similar and the customers felt cheated. It introduced the 1.2 Kappa shortly after the regular i10 for not much of a difference. Imagine what a Jazz price cut will do its 'loyal' customers. If they deck up the Jazz like it is said in Post 1 and sell it for the same price, it might see some finished goods inventory move.

[AbhiJ]

Originally Posted by ashutoshb

Why don't they go the i20 way? Subtract some goodies and launch a new base model with a lower price. That should pull come customers.

The Jazz doesnt come loaded anyways...

Top Spec i20's and Punto have much better toys...

If Honda wants to sell the jazz as a niche product, It has to load it up accordingly.

IMO If I am to pay a substantial premium over the i20, it has to be a for a 1.5 L, 120 bhp engine and a flappy paddle auto gearbox.

[Abhi_Automobile]

Imagine if they reduce the price to say 6.5 lacs . Will it be fair to the people who purchased it before?
They cannot hand over 1.5 lac rupee checks to old customer and nor will they and might i say it would be plain stupid for any company to do so(yes apple did it but 100 dollars is one thing and 2 lacs another)

He he! I was waiting for this. This gives me a good chance to turn my earlier analysis into a case study. Can you compare 'Apple' with 'Honda'? Should Honda's brand strategy be similar to Apple'?

Let's look at the 'Target audience'. Apple's target audience is a bunch of brand loyalists and are basically cult followers. For e.g. I have an iPhone. I will not buy a Nokia (whatever model; whatever features!). thats the psyche. If Apple wants to retain these loyalists, they need to be shown the Apple cares for them. Giving the $100 back made them happy. Else, they would have felt cheated. This also made them even stronger cult followers. And I haven't even talked about the 'free brand ambassadors' these people gave Apple!!

Is Honda customers a similar type of people? I don't think so. These are regular customer (who don't swear by Honda name!!!). they buy Hondas coz they found it to be a better car than its competitors. Yes, I agree that the fact that Honda is a well respected and recognized brand helped their cause but was it the decision swaying factor?

From a business standpoint, if Honda reduces the price (which they won't, BTW), they don't need to pay anything to anybody. The set of people who buy Honda for certain set of reasons will still buy them. The ones that don't, still won't!! It will make the car fly off the showroom for sure though

[Abhi_Automobile]

^^ Hyundai did something similar and the customers felt cheated. It introduced the 1.2 Kappa shortly after the regular i10 for not much of a difference.

@Prince--> What difference did it make to its sales. Next to nil. People don't buy Hyundai coz they love the brand. People buy them coz they are good value for money/decent cars.


Guys, why are we making such a fuss abut it. There are many cars which drop in MRP dues to multiple reasons over a period of time. Fiesta was offered for some 5.5 lacs as a 'festive' offer??!! I bet the price was higher at the time of launch.

[breezydrive]

Originally Posted by Abhi_Automobile

.

Guys, why are we making such a fuss abut it. There are many cars which drop in MRP dues to multiple reasons over a period of time.

Well said!

Hyundai Accent is a big example, today the car is available @ Rs.4.99 lac ex -showroom ( All India price). There was a time, it was sold for Rs. 7 lac.

[twinblades]

I honestly don't see Honda hiking their prices. This is good chance to drop the price of the previous models to reasonable rate and bring the new version at a slightly higher or currect top end model's cost. I don't see people queuing up to buy a more costly version of Jazz.

[download2live]

Originally Posted by srishiva

Nice one, then the Jazz will go Jazz-zzz (...yawn)

When I saw their ad first this came into my mind:
Why so serious? Jazz (Read Give us all your money)

[Warhound]

Originally Posted by prince_pervez

^^ Hyundai did something similar and the customers felt cheated. It introduced the 1.2 Kappa shortly after the regular i10 for not much of a difference. Imagine what a Jazz price cut will do its 'loyal' customers. If they deck up the Jazz like it is said in Post 1 and sell it for the same price, it might see some finished goods inventory move.

Its a different case. The i10 was not overpriced and people bought it for the VFM. They felt cheated because a better product was introduced within months and the price was not escalated.

People who bought Jazz KNEW it is overpriced from day 1. If there is a price correction in the segment people will feel cheated and refrain from purchasing another Honda in future or simply wait for prices to drop, both which can be detrimental to the sales of Honda.

Its basically a situation Honda got itself in and cant get out of because of their exorbitant pricing.. Reduce price and piss of the loyalists or keep prices where they are and see lagging sales.

If I was Honda and was selling under capacity Id go for a price correction and send vouchers to all the initial owners for free alloys/increased maintenance/all the fancy gizmos etc etc to keep everyone happy.

[blackasta]

Originally Posted by breezydrive

Well said!

Hyundai Accent is a big example, today the car is available @ Rs.4.99 lac ex -showroom ( All India price). There was a time, it was sold for Rs. 7 lac.

Hyundai accent is at the end of its shelf life, which Jazz is not!

[twinblades]

Originally Posted by Warhound

Its a different case. The i10 was not overpriced and people bought it for the VFM. They felt cheated because a better product was introduced within months and the price was not escalated.

People who bought Jazz KNEW it is overpriced from day 1. If there is a price correction in the segment people will feel cheated and refrain from purchasing another Honda in future or simply wait for prices to drop, both which can be detrimental to the sales of Honda.

Its basically a situation Honda got itself in and cant get out of because of their exorbitant pricing.. Reduce price and piss of the loyalists or keep prices where they are and see lagging sales.

If I was Honda and was selling under capacity Id go for a price correction and send vouchers to all the initial owners for free alloys/increased maintenance/all the fancy gizmos etc etc to keep everyone happy.

Yeah i think this is the way to go. Both parties would be happy(loyalists and the new ones). Vouchers would hurt them financially however not selling the car is definitely hurting them more.

[isldhn]

Originally Posted by vinaydas

Think Logically people.
Honda Already has sold the Jazz to "Many" people for close to 8 lacs(OTR Bangalore).
Imagine if they reduce the price to say 6.5 lacs . Will it be fair to the people who purchased it before?
They cannot hand over 1.5 lac rupee checks to old customer and nor will they and might i say it would be plain stupid for any company to do so(yes apple did it but 100 dollars is one thing and 2 lacs another).
If you want any price reduction on the jazz (1.5-2 lacs). you have to wait for the Next model change (ala Superb) in around 3 years.

Sorry for going OT,but compare the percentage( around 20%) of compensation given by Apple and You'll find that it is the same as we are talking about here.
By making such a bold move( which i think they won't) Honda can solidify it's position in the Indian market with regards to future launches. Lets not forget that Honda will surely be entering the A segment not far from now.
They wouldnt be incurring a loss(i think) by doing what we all are talking about but will just be reducing their profit margins. And this would help them in a cascading way.

[Warhound]

Originally Posted by isldhn

Sorry for going OT,but compare the percentage( around 20%) of compensation given by Apple and You'll find that it is the same as we are talking about here.

Its really absurd to compare apples 20% discount to those of the car. Firstly, at the fear of going Off topic may I stress that Apples manufacturing cost is NOWHERE close to $500/unit. It is place absurdly high because of the cult following it has.

Secondly, in the US, you are roped into a 2 year agreement with ATT which charges you a minimum of $100/month so basically you shelf atleast $2400/contract.

If honda cars stipulated that you may purchase only SHELL gas and no other and bound you by a contract for 2 years, SHELL will gleefully pay HONDA 1.5lac/car which may be passed off to the consumer.

[isldhn]

Originally Posted by Warhound

Its really absurd to compare apples 20% discount to those of the car. Firstly, at the fear of going Off topic may I stress that Apples manufacturing cost is NOWHERE close to $500/unit. It is place absurdly high because of the cult following it has.

Secondly, in the US, you are roped into a 2 year agreement with ATT which charges you a minimum of $100/month so basically you shelf atleast $2400/contract.

If honda cars stipulated that you may purchase only SHELL gas and no other and bound you by a contract for 2 years, SHELL will gleefully pay HONDA 1.5lac/car which may be passed off to the consumer.

FYI, It was not me who compared Apple to Honda( which i do think is absurd). I merely replied to a post doing the same.

Secondly, in the US, you are roped into a 2 year agreement with ATT which charges you a minimum of $100/month so basically you shelf atleast $2400/contract.

If honda cars stipulated that you may purchase only SHELL gas and no other and bound you by a contract for 2 years, SHELL will gleefully pay HONDA 1.5lac/car which may be passed off to the consumer.

Well! Now who's comparing Cars to Cell Phones.